Discussion on economic question.

I'm not sure how this chat thing works but it seems the site offers the facility to create rooms specific to a topic/question. First time in chat, hehe.

M i ech

And now, let me try to explain what I meant.

Does the owner of factory or land actually need to do any work to extract profit?

Hatoru Hansou

10:03 PM

OK, I'm listening. Don't worry about impartiality.

I guess... no. They just own.

M i ech

Indeed.

Factory owner can hire workers to produce goods.

Hire managers to manage running the place.

Hire people to manage the sales.

And so on.

As such, all the actual work is done by someone else, not owner.

Hatoru Hansou

In rare cases the owner takes a role in the company, probably as boss or manager, but that doesn't change what you mean.

M i ech

Yes, you are correct. However, that changes ratio of input.

Owner takes part of the profit of workers (both blue and white collar), just by ownership.

And now the question is, what is this system called?

Hatoru Hansou

You beat me there. Does it have a name? Capitalism maybe, but I'm not sure capitalism has something to do with ownership.

M i ech

You are right assuming this is capitalism.

Hatoru Hansou

10:09 PM

OK, I think I see the picture. Continue.

M i ech

This is the underlying basis of capitalism. Details vary how many limits you stack on it.

give me a second to check term

Hatoru Hansou

sure

M i ech

"Progressive tax" is a tax which has different rate, depending on taxed amount.

Progressive taxes are ones designed to tax rich by higher percentage than the poor.

As opposed to so called "flat taxes".

Hmm. I got ahead of myself a bit. We will come back to taxes again.

Do you know any other forms of ownership of factories or land?

Hatoru Hansou

I'm familiar to the concept. First time I hear "progressive taxes" but... don't ask from what country I am, as I don't like to post personal info in internet but I will tell you this. My country is trying to implement that concept, with a lot of opposition of course. I'm freelancer, and whit that system I'm paying taxes that I can afford, under a regimen they call "simplified regimen". I don't sure that is the correct translation. So I think I know what you mean.

Once you pass some horizon of income, you are not any more under the "simplified regimen" and you start paying taxes as big companies, too high let me say.

Other forms of ownership? I'm thinking...

Ownership of goods, ownership of production means... what else?

M i ech

Progressive taxes (income taxes) where I live are done by steps. When you cross to higher level, only income that puts you in that level is taxed higher %.

No, no, I meant something different. But yes, I'm basically referring to concept of "means of production".

In case I described above, factory is a mean of production and is owned privately, by owner.

It can also be owned by state. Or by workers themselves.

Hatoru Hansou

10:20 PM

Or by companies rather than individuals, correcT?

M i ech

Within legal frameworks, companies are people.

But whether owner is a single person, or company, owned in turn by shareholders (who may or may not be companies themselves), it only changes WHO takes profit without doing any work.

Hatoru Hansou

I think here they call it "financial entity", this term applies to both, companies and people. I'm a financial entity. I don't sure I translated the term correctly.

I see what you mean.

M i ech

Within capitalist framework, rich are rich, and disproportionally profit from work done by others, which in turn means they acquire fund to buy more land or hire other people to build more factories.

Hatoru Hansou

When imagined the 7/7 system I was thinking in that some jobs in real life takes to much energy, time and health from people. So a system that respect people right to do something else other than working had sense to me then. But the country has to be really successful to allow it without being inferior than other countries, or that I think, so the need to think how can they do that?

M i ech

I'm closing to it.

Hatoru Hansou

10:27 PM

OK.

M i ech

What I said in comment back then, was about management wages and owner profit.

Some countries do have restrictions on how much owner can extract, or how much more than others manager can make.

Because unless certain skill is rare, what stops owner from paying next to nothing?

Usually, only laws on minimum wage.

Profit motive - owner has every incentive to pay as little as possible, to pocket as much as possible for himself.

Legal restrictions on length of work day, obligatory paid vacation, safety regulations, exist specifically to protect workers from exploitation and risks.

To have system as one you asked for, apart from any productivity issues, it's important to consider this part of the situation.

Limiting income of those who don't actually do any work, or those who get disproportionally large part compared to added work, might be enough, without any changes in productivity.

Consider measures like setting maximum difference between lowest and highest wage in companies.

Or consider making "worker cooperatives" (type of employee-owned enterprise, where there is no external owner, thus all the profits either go to employees/workers or towards extension of the enterprise) more widespread in your world.

Hatoru Hansou

So, with a "max allowed distance" between best wage and worst wage, if a company want to pay more to a role, and its wage is already very hight, the company will have to raise the worst wage too, to avoid crossing the "max allowed distance".

M i ech

For example.

And that will make problem of minimum wages less of a problem.

Hatoru Hansou

If the owner owns many factories, and is immensely rich, it will have to pay super high taxes.

Sorry, continue.

M i ech

Lets take Industrial revolution, for example.

Drive towards maximum profit meant that child labour was rampant back then.

Complete disregard for safety.

And since there were always people looking for work, there was no incentive to ever pay anything but absolute minimum.

That's how unions were born. It's easy to fire one dissenting person. Harder when half of the workforce dissents.

After countless strikes, labour laws were eventually enacted. Governments were forced to enact them.

Hatoru Hansou

10:46 PM

In my fantasy country, such salaries would be illegal, companies would be charged.

M i ech

I am not expert on this, but I do believe that Scandinavian countries do have limits on maximum wage disparity, and large influence of workforce on company policies.

Give me a second.

Hatoru Hansou

I'm no expert either and I'm weak in history, but England comes to mind too. I remember the movie, The Suffragists. Thus, I don't know any real country, so I will take your word on Scandinavian ones, that actually implemented maximum wage disparity. It would be interesting.

M i ech

World Happiness Report

The World Happiness Report is a measure of happiness published by the United Nations Sustainable Development Solutions Network. In July 2011, the UN General Assembly passed a resolution inviting member countries to measure the happiness of their people and to use this to help guide their public policies. On April 2, 2012, this was followed by the first UN High Level Meeting on "Happiness and Well-Being: Defining a New Economic Paradigm," which was chaired by Prime Minister Jigme Thinley of Bhutan, the first and so far only country to have officially adopted gross national happiness instead of gross...

You know. Don't take my word. I might be wrong on details.

All I know is that there's more to development and happiness than Gross Domestic Product (which under capitalist thinking is only measure worth thinking about).

And scandinavia is a poster child of capitalism with socialist policies restricting social inequality.

List of countries by income equality

This is a list of countries or dependencies by income inequality metrics, including Gini coefficients. The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income—and everyone else has zero income). Income distribution can vary greatly from wealth distribution in a country (see List of countries by distribution of wealth). Income from black market economic activity is not included and is the subject of current economic research. == UN and CIA ...

I don't know what are labour laws where you live. And since you are freelancer, your relation to them is different than what I mostly talk about.

Hatoru Hansou

A question, speculate all you wish to answer it: would you say that maximum wage disparity favors existence of good with so restrictive cost that the worst waged workers won't ever be able to pay? Would you say that maximum wage disparity limits have the potential to facilitate access to the most expensive goods?

M i ech

11:02 PM

First question: Sure it does. They are called "status symbols".

What is the point of jewellery worth millions, or limited edition sports cars if not to show off?

Hatoru Hansou

And yes, freelancers have it easier in some fields. But without the "simplified system" I would have to stop being freelancer and seek work elsewhere. Taxes in my country have the potential of being really high.

M i ech

Those goods, exist only to show that owner can throw so much money on something that apart from showing off wealth, is useless.

Hatoru Hansou

I see the point.

As another commenter said. "The type of society determines where resources are allocated.".

M i ech

I don't know where you live, but from what you say, it sounds as if either planned policy is implemented incorrectly, or someone lobbied to include that side effect as actual perk.

Hatoru Hansou

I think, from a psychological point of view, and I by no mean expert or advanced in that field, everything is about empathy.

No, is not like that.

I will try to resume it:

There are a lot of well thought social policies proposals. But there are a lot of suspicious interests pushing again those. My point of view of my own country has a lot of bias, you can't trust me here.

M i ech

11:08 PM

As for: Would you say that maximum wage disparity limits have the potential to facilitate access to the most expensive goods? No idea but doubt it. Such limits will decrease disparity. Right now rich become richer and poor become poorer, limits would slow down this trend, perhaps even reverse it to an extent, but fact will remain that "status symbols" will always exist.

Hatoru Hansou

I think that can't be changed. Again, maybe it has something to do with how human brain evolved.

M i ech

As for your suggestion, that someone might said so 2000 years ago. Well. We certainly know that someone wrote on this about 150 years ago - Karl Marx did.

Besides that, it depends on if you think Jesus was real person, and how exactly you view his ideas.

Hatoru Hansou

I have to be careful, and not make the mistake of present characters that aren't believable as human beings. They can be... all Buddhas.

M i ech

Because those actually got twisted heavily in poplar perception.

Hatoru Hansou

I came from a somehow catholic background myself, 90% of my family is religious. But being fair, I cannot probe that Jesus existed. And to be honest, I don't care very much.

M i ech

11:13 PM

I'm not sure evolution is to blame here. Small societies, tribes etc. generally share work and results of work in remarkably communist way.

Hatoru Hansou

I correct, I said "They can be... all Buddhas" where I mean "They can't be". But I guess you got me right.

M i ech

I knew you missed can't. By "Because those actually got twisted heavily in poplar perception." I meant that a bunch of people I know to identify as catholics pretty much do opposite of what Jesus was teaching.

BTW, it's possible to edit. Messages in this chat.

Mouse over what you wrote, and you should see arrow on left side.

Click it, and there should be edit option.

Hatoru Hansou

Haha, yeah. I know those too.

Ah... OK, I got how to edit messages now. Thank you.

When I was younger I entered in a very long debate with may father about Marx's ideas.

The debate was impossible to define back then so we stopped.

Later I revive it with a classmate. In the end we concluded that capitalism has a lot of vulnerabilities and flaws. "Defective by design". Actually, I think it doesn't even have a design. But we also concluded that Marx ideas are too old, and too ignorant of modern realities and knowledge. Something else is needed.

M i ech

If you ask me, the only real flaw of Marx, is that he happened to exist too early.

While industrial revolution introduced concept of automation, making underlying issues more apparent.

Hatoru Hansou

I talked about human brain evolution because that was one of her arguments. Usually, system designed in the drafting table fail for that same reason while capitalism, with all those flaws survives because it evolved naturally, according to her argument.

M i ech

11:23 PM

It's not until relatively recently that automation also may provide answers.

Hatoru Hansou

You mean that Marx spirit was right

M i ech

Within 20 or so years, self driving cars will become ubiquitous.

What will happen then?

Hatoru Hansou

But he lacked the means?

M i ech

Millions of people will lose jobs. Replaced by machines.

Give me a moment.

Hatoru Hansou

I see your point, under current system, they would starve to death.

M i ech

11:26 PM

Yes.

ranker.com/list/most-common-jobs-in-america/american-jobs

Taking USA as example.

This list shows about 2 million "freight and stocking" workers. 1.5 million truck drivers. (edited for I misread)

Factor in cab drivers, and others.

And I would hazard a bet that's 10 million people.

Those people are going to lose jobs quickly, and they will not be easily absorbed into other branches.

But, this is just the start.

Computers are already putting stockbrokers out of work.

No one is safe.

Or "safe".

Drivers and shop clerks will be first to go, but engineers and doctors will be replaced eventually too.

At some point, advances in expert systems will even put roboticists who design such systems out of work either.

Hatoru Hansou

The traditional argument in defense of machines taking out humans jobs it that machines only can take repetitive jobs where speed and precision is the only that matters while other types of jobs, specially creative ones, are safe. Today, with the emerging machine learning, I will example "coding bots", even some creative jobs tremble. I somewhat informed.

M i ech

Yep.

This means, that while it might be possible to have all human needs satisfied with barely any human work, it requires... well... seizing the means of production.

Hatoru Hansou

There are also the human aspect to consider. Again, from my classmate, people can't adapt so fast. They can't learn new skills so fast and aging making it worse.

I admit I am the type of person that thinks that I can learn any new skill.

M i ech

So when in back then Tsarist Russia, the first communist experiment was made. I think it was made too early, by roughly a century. Perhaps more. Of course what kind of people got to the top didn't help at all...

Whatever happens, further automation will change the world. I could say that "it remains to be seen if for better or worse".

Or perhaps it should be said that it depends on everyone, what the outcome will be.

But I'm running off on tangential speculation.

Hatoru Hansou

Again, speculate all you wish: why do you think westerns countries feared the emerge of communism so much? They always argued again its viability but I got the feeling that something was not said.

M i ech

11:38 PM

(you also now know why I said that I'm not truly impartial, while I find restricted capitalism workable right now, I believe that in light of advancement of automation, survival of mankind hinges on ditching capitalism)

Why kings were against French Revolution?

Because after Louis XVI was beheaded, they feared their own subjects would see that kings bleed too.

That divine right to rule is a fraud.

Hatoru Hansou

I recognize all the flaws of capitalism, it's obviously broken but none of the alternatives, that I have knowledge of, convince me totally. Said that, all that panic towards a different mindset is, in my opinion, and exaggeration.

I see

M i ech

I will come off as conspiracy theorist. But I think that hatred towards communism comes from fear of the rich.

Remember that in USA, corruption is pretty much legal.

Hatoru Hansou

So he took it as a menace to his survival.

... Is it?

M i ech

Private funding of political parties.

Hatoru Hansou

Then I stay in my country, haha.

Ah... that

M i ech

11:41 PM

And lobbying.

Though lobbying is widespread everywhere now.

Hatoru Hansou

Nobody here can prove it, but many suspects that private funding happens here too.

M i ech

Lobbyists are people paid to bribe politicians in "plausibly deniable" way.

I prefer to call it more straightforwardly.

Hatoru Hansou

So, if a politician see that accepting "contributions" can't hurt very much if somebody points at him with the finger, he will accept probably.

M i ech

But it all doesn't actually need conspiracy.

If lobbying i permitted.

Then every company acting in it's own interests in this case at the same time acts in the interests of other companies.

If say, labour unions, are infringing on profit margins of one company, they would do so on profits of another.

Thus, they both have a reason to lobby against unions and labour laws.

In modern world, largest companies exist in international framework. Barring patent laws and IP laws which exist mostly to solve disputes between them, any change benefiting one company, is likely to benefit another one.

Any tax exempts. Any work safety changes etc.

Hatoru Hansou

Scary. Decisions conditioning our lives must be taken based on logical thinking, not like that.

M i ech

11:47 PM

Thus, they will have incentive to seemingly work together, while in fact they work in their own interest.

That's where a lot of "conspiracy theories" come from.

Well, at least that's how I see it.

Hatoru Hansou

I see. Thank you very much for your time. You expanded my mind.

M i ech

No problem. But remember - I was not impartial. And there are things on which I can very well be wrong.

You need to examine it yourself. And check other points of view.

(one hint: anyone who doesn't even consider that he/she might be wrong is not worth listening to)

Hatoru Hansou

Sure. It's what I'm trying to do. I will keep that hint in mind. If you close yourself you kill self improvement and your evolution stops.

No fun in being stalled.

M i ech

I assume you mean evolution in memetic (as defined by Dawkins, not as defined by internet) sense here?

Hatoru Hansou

I mean it as in "personal growth", "growing as a person". I may very well translating the terms wrong.

I admit I abuse the word "evolution" a bit.

M i ech

11:55 PM

Richard Dawkins postulated that cultural information is subject to evolution in comparable way to genetic information.

He dubbed units of cultural information "memes". That's where the word comes from. Internet co-opted the word to extremely simplified version of original. Internet memes are in a way cultural information.

However in original sense language, maths, hygiene etc. are cultural information too.

Hatoru Hansou

I see. Sincerely, I didn't knew.

M i ech

While genes only disappear when carrier dies, memes can be transmitted.

Hatoru Hansou

transmitted beyond genetics. Thus, they probably have meaning only for humans. Am I right?

M i ech

Dawkins postulated that thus, all culture is a result of evolution of memes, or complexes of memes dubbed "memeplexes" (national culture would be memplex here)

Hatoru Hansou

I see

M i ech

11:59 PM

He also postulated, that for genes, we are merely carriers, and genes evolve not by adapting host, but making sure they (genes) spread.

Transcript for

Discussion on economic question.